C.H. Robinson is pushing back against a lawsuit filed by more than a dozen growers seeking more than $1 billion over allegations the third-party logistics giant engaged in “deceptive business practices.”
“We deny any and all allegations of wrongdoing and look forward to vigorously defending our actions, as well as filing legitimate counterclaims against the growers,” C.H. Robinson said in a statement to FreightWaves.
The complaint, which seeks class-action status, was filed in the U.S. District Court for the District of Minnesota in mid-January.
The growers allege that Robinson Fresh, a company owned by C.H. Robinson Worldwide Inc., headquartered in Eden Prairie, Minnesota, profited from the transportation of consigned produce, termed “freight topping,” to financially benefit the company without the growers’ knowledge or consent.
The complaint claims C.H. Robinson arranged freight transportation for the produce loads and contracted with carriers for an additional 2% reduction of the freight charges. The growers’ attorneys allege C.H. Robinson never disclosed the reduction and the money gained from the discount was not passed on to them.
“The growers were never informed that Robinson, in addition to the compensation it was receiving as a commission, which the parties had contracted for, was also taking a percentage on the freight,” Craig Stokes, an attorney for the growers, told FreightWaves.
Stokes argues that under the U.S. Department of Agriculture’s Perishable Agricultural Commodities Act of 1930 (PACA), C.H. Robinson, acting as the agent for the growers, is required to disclose to them any discounts or rebates it received.
“It’s about transparency,” Stokes told FreightWaves. “Under PACA, you are required to pass along all costs related to the transaction. If you are receiving a discount on freight costs, this should be disclosed to the growers.”
C.H. Robinson says in a statement that the complaint “was designed to capture media attention, and it contains an enormous amount of self-serving falsehoods as well as blatant mischaracterizations and fabrications about our company, teams and the actual agreements signed by the growers.”
According to the company, it lent money to several of the growers named in the complaint. However, instead of repaying the money owed to Robinson, the growers are “using this complaint to avoid paying their debt,” C.H. Robinson said in its statement.
“We are proud of the work we do with our teams, growers, and customers throughout the world, and we look forward to putting this entirely meritless complaint behind us,” said Michael Castagnetto, president of Robinson Fresh, in a statement.
The complaint also alleges that Robinson Fresh received “secret rebates” from the growers’ seed suppliers as well as from the pallet rental company, CHEP USA, but those rebates and profits weren’t shared with the growers.
“Robinson created a rebate that could be as high as a nickel a pallet on every rental, but again there was no disclosure to the growers,” Stokes said. “It’s one thing if you disclose the rebates to the growers and you get informed consent, but the problem we see here is [Robinson] didn’t get permission.”
C.H. Robinson claims the USDA’s PACA division conducted an onsite, seven-day investigation into the allegations in the complaint but failed to find any irregularities or take disciplinary actions against C.H. Robinson as a result of the investigation.
As of press time, FreightWaves’ call and email to the PACA division seeking comment on the onsite investigation into C.H. Robinson’s business practices had not been returned.
Texas Public Radio first reported on the growers’ lawsuit on Feb. 7.
This is a developing story.
Tye Moore
Why is C.H.ROBINSON filing a counter claim…if these growers had not called them on their bullshit they would have said NOthings and kept business as usual…in some cases they back charged us the carriers for produce
Noble1 suggests SMART truck drivers should UNITE & collectively cut out the middlemen from picking truck driver pockets ! IMHO
THIS IS A GIFT IS DISGUISE !
Throughout my advocacy for truck driver to UNITE and create an Alliance with subsidiaries I’ve clearly emphasized that one among many must be agriculture , a major basic necessity !
When we see stories like the one above which state that growers/farmers are potentially being taken advantage of it’s our cue !
Farmers are hard working , the backbone to our survival , under appreciated , and underpaid ! Sound familiar ? Apparently truck drivers and farmers have a lot in common and need each other . So why not partner with each other and clearly be transparent among one another while mutually prospering ethically and collectively in the process ?
Now we’re talking !
That’s one out of two under our belt . Next potential partner to conquer and unite with are those in basic materials , the miners !
Cut out the middlemen and gain control of the necessities ! What isn’t grown is mined ! Either one needs to be transported !
Conquer and UNITE those 3 ! They all need and depend on labourers ! Broaden your horizon ! Trucking is an important means to an end and you’re at the heart of that means ! UNITE & CONQUER !
IMHO
Elvis Durant
Most Brokers typically do it. Nothing new here. And when you start asking them about LET ME SEE THE ORIGINAL INVOICE ON HOW MUCH THE BROKER CHARGE THE SHIPPER, Thats when They drop you and stop giving you work……can name a few…..NO BROKER survives on a 10/15% cut on a load. Come on now!
Tony Curvey
I agree with what you said; however, it sounds like Robinson was receiving a commission, from the growers, for their services. If so, I certainly understand why the outcry from the growers. Robinson should not double dip as the untold consequences of their actions could/could have affected the perishable products that were hauled. Just sayin…
Art
Reminds me of the US Foods accounting scandal involving “rebates” from vendors.
Cost plus sounds great, but greed prevails finding a way to charge more.
Just like price fixing doesnt work, someone will secretly undercut others.
Artificially inflated costs then returned back to company as rebates.
Genious!
ThaGearJammer25/8
Pulled a many Robinson fresh loads in my day. Had a hunch something was up and canceled our contract almost 3 years ago. 4-19 CFO Andrew Clarke left. CFO’s strike me as calculated… Crabby, edgy, constant pain and poor attitude is a tell about your brokerage house. Pay attention to the little things… Continuous paperwork issues on the billing side?? What?
They figure they can run ya dry, steal your data on top of it and someone else will fill in once your leave. Let me tell ya partner business is tough and u value talent if you want to make it! We are all in it together! No trucking without good back office.
Thanks for the “sparknotes” Noble1
JimJam
Crooked company carries crops.
Noble1 suggests SMART truck drivers should UNITE & collectively cut out the middlemen from picking truck driver pockets ! IMHO
More elaborate article on the subject :
Quote :
“Farmers slam America’s largest trucking brokerage with a $1.1 billion lawsuit
Farmers in North and South America are suing C.H. Robinson, the world’s third-largest logistics company, alleging illegal business practices that they claim defrauded them, Texas Public Radio reported Friday.
David Moore and nearly a dozen other farmers claim C.H. Robinson, particularly fresh produce and products distributor Robinson Fresh, overcharged for shipping costs, illegitimately held onto additional profits, and underpaid farmers for many types of products including melons and asparagus.
C.H. Robinson denied the farmers’ accusations.
“We deny any and all allegations of wrongdoing and look forward to vigorously defending our actions, as well as filing legitimate counterclaims against the growers,” C.H. Robinson said to Business Insider in a statement.
The lawsuit was filed in U.S. District Court in Minnesota mid-January seeking $1.1 billion over claims of concealed and unpaid profits as well as punitive damages.
To me, this is a critical lawsuit because farmers have struggled financially and the company has as a legal and fiduciary responsibility to act in the grower’s economic best interest,” Andrew Thomasson, a New Jersey-based consumer-protection attorney representing the farmers, told Business Insider in a statement. “But it’s actually hurting these farmers and their community.”
The farmers accuse C.H. Robinson in the lawsuit of “freight topping,” or charging farmers additional hidden fees for transportation costs. Thomasson said the alleged freight topping negatively affected all stakeholders including truckers, investors, and bankrupted farmers in some cases.
The case joins other legal actions that allege trucking companies are charging extraneous fees. In December, the Federal Trade Commission sued Atlanta, Georgia-based FleetCor, claiming the company garnished “at least hundreds of millions” in extra fees from small businesses.
The suit against C.H. Robinson accuses the company of tracking the profits from freight topping in an internal accounting system while presenting incomplete invoices from a separate system to farmers and grocers.
But the company maintains the position that the suit is illegitimate and that several farmers were using the lawsuit to avoid paying back loans from the company.
“C.H. Robinson will assert its right to collect the significant amounts it is owed by the growers,” the company said in its statement to Business Insider.
C.H. Robinson said the Perishable Agricultural Commodities Act division of the United States Department of Agriculture conducted a seven-day onsite investigation into the suit’s claims and found no violations nor need to take any disciplinary action.
Farmers are dependent on C.H. Robinson during the growing season because it is difficult to market their crops to or find loans elsewhere, Thomasson said. He claimed that farmers are afraid that if they make waves, C.H. Robinson would harm them with financial repercussions.
“Someone needs to stand up for the people that don’t have the ability to stand up for themselves,” Thomasson said, “It is legally, morally and ethically wrong what Robinson is doing and it needs to stop.”
The lawsuit is seeking class-action status, according to Thomasson. However, to proceed as a class action lawsuit the court must certify it as such.
C.H. Robinson said it would oppose any attempt to grant the lawsuit class-action status, which would allow other farmers to join the legal action.
Noble1 suggests SMART truck drivers should UNITE & collectively cut out the middlemen from picking truck driver pockets ! IMHO
Quote :
“seeking more than $1 billion over allegations ”
Darn right you’re gonna deny , LOL !
Quote :
“According to the company, it lent money to several of the growers named in the complaint. However, instead of repaying the money owed to Robinson, the growers are “using this complaint to avoid paying their debt,” C.H. Robinson said in its statement.”
So they’re saying that several growers are a bunch of frauds . That’s quite defamatory . This could get ugly if C.H.R is wrong .
IMHO